Former MCDI Officials Indicted for Wire Fraud, Program Fraud, and Obstruction of Justice

Springfield, MA.. Four former officials of the Massachusetts Career Development Institute ("MCDI"), including the Executive Director, have been indicted on charges of fraud and obstruction of justice. MCDI, a quasi private/public department of the City of Springfield located at 140 Wilbraham Avenue in Springfield, provides educational and job training programs for income-eligible participants and other individuals and receives federal funding.

United States Attorney Michael J. Sullivan; William D. Chase, Acting Special Agent in Charge of the Federal Bureau of Investigation in New England; Peter Emerzian, Special Agent in Charge of Department of Housing and Urban Development's Office of Inspector General; Joseph A. Galasso, Special Agent in Charge of the U.S. Internal Revenue Service, Criminal Investigation; and Gary E. Mathison, Special Agent in Charge of the Department of Education's Office of Inspector General for New England, announced today that a federal grand jury returned an indictment charging GERALD PHILLIPS, GIUSEPPI POLIMENI, JAMIE DWYER, and LUISA CARDAROPOLI, with conspiracy to commit wire fraud, wire fraud, federal program fraud, and obstruction of justice.

"The use of positions of responsibility and power for personal gain, as alleged in the indictment, is an unconscionable breach of the public trust," stated U.S. Attorney Sullivan. "Such conduct undermines confidence that their government institutions are being run honestly. We in law enforcement are committed to investigating and prosecuting any instances of public corruption and attempts to obstruct investigations."

"Public Corruption threatens and impedes social and economic development in areas such as Springfield where the federal government deems federal funding assistance is most appropriate," commented FBI Acting Special Agent in Charge William D. Chase.

The indictment specifically charges PHILLIPS, age 48, of 272 Longhill Cooper Street, Springfield, Massachusetts, with one count of conspiracy to commit wire fraud, three counts of wire fraud, three counts of federal program fraud, and one count of threatening a witness. PHILLIPS was the Executive Director of MCDI and the former chairman of the Springfield Police Commission.

The indictment charges POLIMENI, age 53, of 248 Roy Street, Springfield, Massachusetts, with one count of conspiracy to commit wire fraud, three counts of wire fraud, three counts of federal program fraud, and three counts of obstruction of justice. POLIMENI was the Director of MCDI, Inc. who retired in June, 2002.

DWYER, age 51, of 548 Nassau Dr., Springfield, Massachusetts, was charged with one count of conspiracy to commit wire fraud, three counts of wire fraud, three counts of federal program fraud, and two counts of obstruction of justice. According to the indictment, DWYER handled the payroll at MCDI, Inc. Finally, the indictment charges CARDAROPOLI with one count of conspiracy to commit wire fraud, one count of wire fraud, one count of federal program fraud, and one count of obstruction of justice.

MCDI, which receives funding from the Departments of Education and Housing and Urban Development, is a quasi private/public department of the City of Springfield providing educational and job training programs for income-eligible participants and other individuals. MCDI has an affiliate, named MCDI, Inc., that provides similar services. According to the indictment, PHILLIPS, POLIMENI, DWYER, and CARDAROPOLI conspired to commit wire fraud in order to fraudulently obtain for themselves and others money and other things of value from MCDI, Inc. for their own or someone else's personal benefit. This is alleged to have principally occurred by billing the Springfield School Department for hours worked by "no-show" employees.

Inspector General for the U.S. Department of Housing and Urban Development, Office of Inspector General, Kenneth M. Donohue stated, "After providing for the national defense, our government's most important activity is administering and maintaining our laws that bring a degree of order and predictability to commerce and protect our citizens from wrongdoers. This joint prosecutorial effort by the U.S. Attorney's Office, HUD's Office of Inspector General, FBI, IRS, and the Department of Education's, Office of Inspector General, has helped send a strong message that those who seek to unlawfully profit by defrauding programs within HUD will be vigorously prosecuted."

"The IRS, Criminal Investigation and other investigative agencies will continue to vigorously investigate criminal conduct which directly effects the quality of life in our communities," stated Joseph A. Galasso, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.

The indictment identifies specifically three no-show employees: POLIMENI's son-in-law, a former MCDI student and employee, and CARDAROPOLI. According to testimony previously provided during a detention hearing, the former MCDI student and employee who received her no-show job in return for sexual favors to PHILLIPS. The scheme operated by POLIMENI and Dwyer fabricating summary payroll sheets reflecting hours worked by POLIMENI's son-in-law, the MCDI student, and CARDAROPOLI and then faxing those payroll sheets to MCDI, Inc.'s payroll service. The payroll service then issued payroll checks in the name of POLIMENI's son-in-law, the MCDI student, and CARDAROPOLI. According to the indictment, PHILLIPS and POLIMENI cashed some of the MCDI student's payroll checks.

The indictment additionally alleges that POLIMENI, DWYER and CARDAROPOLI obstructed justice. It is alleged that POLIMENI and DWYER altered POLIMENI's son-in-law's timesheets before producing those timesheets to the grand jury to make it appear as if he actually worked at MCDI, Inc. It is also alleged that POLIMENI, DWYER and CARDAROPOLI obstructed justice during interviews by Special Agents of the FBI. Specifically it is alleged that POLIMENI falsely denied any knowledge of no-show employees. It is alleged that DWYER falsely stated that she believed the MCDI student worked a full shift. It is alleged that CARDAROPOLI falsely stated that she in fact worked twenty to twenty-five hours per week at MCDI, Inc.

Finally, the indictment alleges that PHILLIPS met with the former MCDI student at the Foodmart on Belmont Avenue in Springfield, after she was called as a witness to the grand jury. It is alleged that PHILLIPS threatened the former MCDI student by telling her that she should keep her mouth shut or she would "disappear." PHILLIPS was charged by complaint and arrested on March 21, 2003 for this crime, which is now incorporated in today's indictment.

If convicted, PHILLIPS, POLIMENI, DWYER, and CARDAROPOLI face a maximum term of imprisonment of 5 years and a fine of $250,000 for the conspiracy charge and each wire fraud and program fraud charge. Additionally, POLIMENI, DWYER, and CARDAROPOLI face a maximum term of imprisonment of 10 years and a fine of $250,000 for each obstruction of justice charge. Finally, PHILLIPS faces a maximum term of imprisonment of 10 years and a fine of $250,000 for the threatening a witness charge.

This case is the result of an investigation by the Federal Bureau of Investigation, the Department of Housing and Urban Development's Office of Inspector General, the U.S. Internal Revenue Service, Criminal Investigation, and the Department of Education's Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney William M. Welch, II in Sullivan's Springfield Office.